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Government

Outside the box

Five proposed solutions to Detroit’s economic crisis

Berlin train station turned art museum.
Other regions are speeding ahead with light rail.
Louis Schimmel
Adamah's vision of urban greenery.
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Tax fracas over GM plant revenues pits Detroit against tiny Hamtramck

 

Published 1/26/2005

We went looking for radical ideas. Not ideas we necessarily espouse, but rather examples of thinking outside the box. Consider what follows a starting point, a place to begin the debate about where to go from here. Because, face it, city business as usual has only led us to where we are now, staring at the prospect of a $230 million deficit.

In the short term, that means only one thing: pain. Cuts have to be made, and they are going to hurt. They will hurt the people losing jobs and those who depend on the services that will be cut.

But what about the long term? What can the city do to ensure we don’t continue in a downward spiral of declining population, leading to less revenue, leading to more cuts, which in turn leads to more population loss, producing even less revenue .... and on and on and on.

There has to be a better way. The question is, which way?

IDEA 1 Go on a diet

Detroit could stand to lose some serious weight, and we’re not talking about on the bathroom scale. While the city ranks near the top of the list, nationwide, for most-obese residents, the city’s government is just as bloated.

In a study completed in 2002 by consultants Bain and Co. for the city of Atlanta, Detroit ranked third, after Seattle and Boston, in spending per capita among cities studied. In 1998-1999 Detroit (current population 951,000) spent $1,127 per resident, while Seattle (current population 563,000) spent $1,213 per resident on services including transit, administration, public safety, the environment, education and interest payments on debt and social services. In contrast, Columbus, Ohio (population 711,000), spent $748 per resident.

The sad thing is that with all that money spent, the services in Detroit are not so great, though they’ve been getting better recently as can be evidenced in cleaner streets and parks and efficient trash pickup and snow plowing.

Still, Detroit could transform itself into a leaner and cleaner, more efficient and effective service-provider if politicians had the will to do a very simple thing (in concept): Fire nearly everyone, sell nearly everything and hire private companies to pick up trash, light streets and parks, inspect building safety and that’s about it if you’re as broke as Detroit. At least, that’s the thinking of anti-tax conservatives who want to see government run more like a business. Yet, the notion is spreading among Democrats who’ve witnessed the wasteful blundering of highly inefficient bureaucracies such as Detroit’s.

Now we all know such cuts wouldn’t be simple in Detroit. First, the voting base in Detroit is thick with city employees and their relatives, making such a move politically dangerous; also, firing everyone will send an already high unemployment rate — reaching a staggering 14 percent — through the roof. And union leaders and existing contracts could block major changes.

But it’s happened elsewhere to some degree. Chicago is only one city that’s claimed to have made financial headway and improved services by decreasing the city’s work force and hiring private companies to do the work.

In Michigan, Louis Schimmel was the guy appointed by former Republican Gov. John Engler to balance the books in Hamtramck. Before that he was the court-ordered receiver for the city of Ecorse. Though he handed Hamtramck back to its mayor and City Council in November after erasing a $2.5 million deficit, Schimmel retains control over negotiating labor contracts, which account for a large portion of the city’s budget.

Schimmel is a former municipal bond agent in Detroit (for 30 years his company assisted Detroit and other cities in selling bonds on Wall Street) and a proponent of the privatization model, though he says he wouldn’t go so far as to say, “Fire everyone.”

When he went into Hamtramck, the town couldn’t pay its bills and wasn’t picking up the trash; rats were becoming a big problem. To balance the books, Schimmel says he figured out what could be cut and what should be saved.

In Detroit, the city spends $600 million on its payroll and benefits, or about half its budget. Politics impedes big changes, Schimmel says.

“I see a city that’s unwilling to do business a different way,” Schimmel says of Detroit. “It’s pretty simple, really. I’d say first you have to get rid of the public lighting system and privatize and eliminate a bunch of things the city does. The convention center, they ought to get that albatross off their back. Garbage pickup, tree maintenance, the entire Department of Public Works — over time all of those services can be provided by private companies at far less cost. You don’t have to fire people; you could look at retirement and not hire new people, and over time contract out. That way you get out of the labor costs and the business of buying and fixing expensive equipment, and paying the insurance, and you get people, companies, that specialize in plowing snow or maintaining parks.

“Detroit will never do it because it’s the thinking there that the city is the last resort to provide jobs. Everyone wants to get their friend a job in Detroit. It’s a very inefficient work force and it’s very expensive. And they have very lucrative benefits.

“You can have schemes and bad deals with contractors, no doubt. But if you monitor it and hold competitive bids, you can find experts that provide services at less cost.

“It’s obvious that you save a lot. Hamtramck has a balanced budget, better services and no more revenues than we had before.” —LMC

IDEA 2 Annex the burbs

If Detroit Mayor Kwame Kilpatrick could have his wildest dream come true (besides wishing the media would collectively drop dead), this is what would happen: The state Legislature would wake up tomorrow and decide to overhaul Michigan’s annexation law, allowing Detroit to aggressively take over its suburbs — namely, Oakland and Macomb counties, and the remainder of Wayne County.

Mon Dieu! Revolution, revolt! Yet, voilŕ! No more property and income tax problems, as Detroit would reap the tax benefits of Oakland’s upper income districts and the Grosse Pointes. Public transit would immediately become a viable option, for Detroit most surely would take its newfound wealth to build a light-rail and clean-bus system that would ferry workers and residents throughout the metro area, allowing — gasp — that’s right — city residents to get to work and schools and into the burbs, and for folks to avoid using their cars! Will auto company employees ride trains? We might never know. …

In addition, the state would have to set up a regional government to represent all the different zones and municipalities.

Crazy, you say? Well, maybe today. But before 1900 this annexation stuff was common, and in less-populous parts of the country, such as the South, it still is. In fact that’s exactly how the state Legislature of New York in 1897 dissolved New York City, the largest city in the country, and the seventh-largest, Brooklyn, and merged them with three semi-rural counties to create the five-borough metropolis known today as the Big Apple (Manhattan, Queens, Bronx, Staten Island, Brooklyn), says David Rusk, author of Cities without Suburbs and a national expert on the matter of annexation.

In 1854, Rusk says, the Pennsylvania Legislature abolished six of the 30 largest cities in America, combined them with 15 townships and created the city-county of Philadelphia.

“Why? In part because the business and city elites believed, and properly so, that you have to have a large and growing tax base” to thrive, Rusk says. Also, media reports from the day indicate that New Yorkers felt it was socially responsible and would lower taxes and increase efficiency to centralize government.

Today, large metropolises across the country that have merged city and suburb are more successful than cities with static borders, such as Detroit, Rusk says, hands down. Take Houston, which in the early 1950s was the same size as Detroit but now has four times Detroit’s area and twice its population, Rusk says. And the success-meter applies to the suburbs as well, he says.

“You can’t very well be a successful suburb of nowhere,” Rusk says.

Rusk has worked with MOSES (a local faith-based initiative to stimulate transit and other reforms) and Gov. Jennifer Granholm’s land-use planning initiative, and he’s not optimistic about potential for a consolidated government here such as has occurred in Louisville, Ky., and in 32 other city-county governments nationwide.

In fact, Detroit features as the first chapter in Rusk’s book as an example of how cities with limited borders suffer when compared to cities with elastic borders. But annexation is never going to happen in Detroit, Rusk says.

“State law won’t allow it,” says Rusk. Cities can’t annex cities, normally, so the annexation strategy only works where there’s unincorporated land around cities, he says. Detroit is completely surrounded by incorporated municipalities.

In addition to the race and class issues in the way of consolidation here, there’s economics.

“Detroit would have no dowry to bring to the marriage,” Rusk says.

There is, however, another option: regional tax-base sharing. Under this plan, 40 percent of the increased tax revenue brought about by growth is distributed to all the municipalities in a region based on need.

Myron Orfield, a University of Minnesota professor, former state legislator and leading proponent of this approach, has studied the Detroit metro area. He says this form of regionalism, if implemented by the state, would benefit all of Macomb County, most of Wayne County and some of Oakland County. Because it distributes taxes achieved from growth, no one would get less. Municipalities that give up part of that new income enjoy the benefit of an entire region that’s more economically viable.

As it is now, says Orfield, we’re seeing one community pitted against another to attract business, often “stealing” from each other. As a result, they are less capable of competing on an international basis.

“One particular city or one county is not going to be able to compete on an international basis,” says Orfield, author of the book American Metropolitics. “They don’t have the size or scale to compete.”

And without revenue-sharing, there is no incentive to cooperate. —LMC & CG

IDEA 3 Move the masses

A regional mass transit system utilizing rail service isn’t exactly an example of outside-the-box thinking in any major metropolitan area of the country. Anywhere, that is, except Detroit.

“Since 1992 more than 30 metropolitan areas, such as Dallas, Denver, Memphis, and Minneapolis have built or planned passenger rail lines,” according to a 2001 report issued by the nonprofit Michigan Land Use Institute (mlui.org). “Many have designed train systems as transit backbones, with buses fanning out like ribs. Rail ridership has quickly outpaced projections in many places. Commercial and residential development also is booming along rail corridors as private money follows the public investment and the crowds.

“Absent from this rail renaissance, however, is Detroit — the nation’s largest metropolitan area without urban passenger rail. Detroit is also the ninth-most congested city in the country.”

That report cited one study that estimated that “every $10 million of capital investment in public transit creates more than 300 jobs and a $30 million boost in local sales.”

The institute’s report quoted David Sanders, vice president of the Metropolitan Affairs Coalition in Detroit, who said, “Quality public transportation is an economic development issue. We are competing with other metro areas for jobs, business, tourism and simply as a good place to live, work and raise a family. Our competitors — Chicago, Cleveland, Atlanta, Dallas — are way ahead of us in terms of public transportation.”

A speedy, efficient, reliable regional mass transit system would help Detroit in two ways. First, it would allow people living here to easily get to the suburbs, where most of the jobs currently are located. In a city registering an unemployment rate almost three times the national average, that is crucial. More people working means more income-tax revenue for the cash-strapped city. But the transit payoff runs in both directions, with easier commutes from the suburbs serving as an enticement for companies to locate in Detroit.

Detroit, however, is moving in the opposite direction, with Mayor Kwame Kilpatrick proposing significant cuts in the city’s bus service as a way of dealing with massive budget shortfalls.

Reversing this trend isn’t something the city can do on its own. Regional, state and federal funds are necessary to promote a viable mass transit system for the metro area. It is not, however, necessarily a question of establishing new funding sources, but rather reallocating the way we spend the money that’s available.

A new report by the institute puts it this way: “Many elected officials continue to press for bigger highways to aid the suburbs and rural areas while freezing the budget for public transit, the lifeblood of successful cities. The trend is most apparent in the Detroit region, where the regional planning agency proposes spending more than $60 billion in highway construction, half of it with no apparent source of revenue, while public transit budgets stagnate. Less than $200 million, or 6 percent, of the state’s $3 billion annual transportation budget supports public transit, an amount that only becomes more insufficient as the state continues to sprawl.”

In other words, the money to boost mass transit pales in comparison to the subsidies the automobile industry receives in the form of road construction and repair.

“There’s so much solid evidence that investing in regional transit is an economic growth engine, it has essentially reached the point of an obvious conclusion,” says Hans Voss, executive director of the Michigan Land Use Institute. —CG

IDEA 4 Back to the garden

Here’s the deal: In this lifetime, we’re never going to see Detroit return to the glory days of the 1950s, when the city’s population approached the 2 million population mark. Since then there has been nothing but decline. Now, the population is about 950,000 and still waning. As a result of this exodus, Detroit has an abundance of vacant and abandoned property, perhaps more than any other major city in America.

And in that desolation lies great opportunity. It is a vision articulated by supporters of what’s known as the Adamah project.

This paper first wrote about Adamah more than three years ago (“Down a green path,” Oct. 31, 2001). At that time, we described a detailed blueprint for redeveloping the city’s East Side. Working with the folks at the nonprofit Boggs Center, architecture students and their advisers at the University of Detroit Mercy conceived of Adamah (it is a Hebrew word meaning “of the earth”) as a development plan that utilized Detroit’s vast amounts of idle land for largely agricultural purposes. The plan involved windmills producing electricity, tree farms and a lumber mill, aquaculture projects producing fish and shrimp, greenhouses for growing flowers and vegetables, grazing land and a dairy, and community gardens, and called for co-housing with shared dining and common areas to create a strong sense of community. Sprawling relics of our industrial past such as the former Packard auto plant would be converted into living and work spaces.

At that time, Stephen Vogel, dean of University of Detroit Mercy’s school of architecture, observed, “When you first look at this, people say it’s wild and crazy. But when you look at it closer, it’s not so wild and crazy at all. What we are talking about doing are all very pragmatic things.”

It was never expected that Adamah would spring to life full-blown. No project this large and this revolutionary could be expected to come to fruition exactly as planned. And though there seems to have been little interest on the part of elected officials and city bureaucrats, the concept is being kept alive by a group of activists who now see Adamah more as an overall vision than a specific project.

Here is how it’s explained on the Web site dedicated to the issue (www.adamah.org):

“Detroit once swept the world as a vision for the prosperous industrial city. Now it symbolizes the degradation of the Rust Belt. Adamah recognizes that we are in a post-industrial era and must redefine ourselves to bring forth the city of the future. We must take a holistic approach to development, incorporating land planning, social needs, community health, regional resources, food, housing, jobs, art and more.”

To that end, Adamah seeks to foster grassroots community development rather than the “hierarchical, top-down approach” that has brought us to this juncture.

Now, instead of simply being a blueprint for redeveloping one sector of the city, Adamah has been transformed into a sort of guiding vision, which, as the Web site explains, “is not so much a set goal as it is a process for creating a better Detroit.” —CG

To learn more about Adamah e-mail info@adamah.org or phone 313-282-6983.

IDEA 5 Artists save the day

If the Shrinking Cities international art project had its way, teams of artists, architects and designers would be flown to Detroit from around the globe to re-think and re-design the city’s landscape. Artists would set up shop in low-income neighborhoods to collaborate with residents on housing and to create public art projects. Architects would design environmentally efficient houses and stores and community centers. Urban agriculture would be a major project. Abandoned buildings such as the train station would be turned into tourist centers with condos, shops and coffee bars. The attraction? In addition to the grand architecture, for instance, a big slide twisting through the building, from the ceiling to the bottom floor! This idea is that of New York/Detroit/international artist Kyong Park, a curator of Shrinking Cities, for a building in Europe.

Another concept of Park’s is to divide Detroit into international districts. Governments could acquire land in the district to own or rent (such as: the German sector) and artists from that country would come to work, exhibit and collaborate with locals. Shows would take place using the Venice Biennial as a model, but using a Detroit-specific concept.

One idea is to make Detroit an international tourist attraction for its musical heritage and sites. This would take a lot of marketing and some redevelopment in the city to provide for the tourists once they get here, as driving back and forth along the boulevard, searching for the fabulous Motown Museum won’t cut it. The Germans, Japanese and Dutch are enthralled with the city’s techno roots, while others might come for the garage rock scene, Motown history and more.

Of course, the big gaping hole in the artists’ plans — as always — is money.

Shrinking Cities is an art project based out of Berlin. The project, launched by a group of artists and intellectuals headed up by German architect Philipp Oswalt, aimed to look at post-industrial cities that were just as blown-out as those in the former East Germany, which at the time were facing major problems with abandoned buildings, demolition costs, unemployment and the like. The project chose as its comparison subjects Detroit; Manchester and Liverpool, England; Leipzig and Halle, Germany; and Ivanovo, Russia. The German government spent nearly $4 million on the art investigation, as it was dubbed by some.

This summer, the exhibit was a success when it opened in Berlin to thousands of viewers. A competition was held for architects and designers to come up with solutions; 10,000 Euro ($13,000) grants were given to winners. The exhibit curators want to bring the exhibit to Detroit but are looking for money to do so.

Two Detroit projects won grants. One will research and collect data on the media attention Detroit gets and publish its findings. The basic argument is that Detroit gets more media coverage than other cities, both good and bad, and the project aims to study the content, effect and potential of this coverage. In addition, two Berlin artists are working to create a public sculpture beehive in the city.

Mitch Cope, an artist and local curator for Shrinking Cities, says it’s unclear when the projects will take place.

Many of the artists working on the Detroit part of the project “came up with more problems than solutions,” Cope says.

“There are a lot of artists who have their eye on Detroit and would love to move here,” he says.

Squatter rights are another thing that could be used to help Detroit, Cope says. In Holland, artists were given buildings to live and work in, he says. “They gave stuff to people who could prove they would take care of the property,” he says.

In Berlin, when the wall came down, artists flooded into the old Communist area and took over buildings, turning them into artists’ co-ops, galleries, community spaces and the like. The artists are widely credited with the vigorous revitalization going on in the city.

“People in Europe, they’re much more sophisticated in their thinking because with all the wars, they are accustomed to thinking about how to rejuvenate cities. Artists aren’t afraid to do those sorts of things. And people are very political, especially in Germany.

“That’s a problem in Detroit. Artists aren’t involved in politics,” Cope says.

The idea of artists flooding Detroit is a beautiful one that seems far off. But there’s always hope. —LMC

Curt Guyette is news editor of Metro Times. Lisa M. Collins is a staff writer. Send comments to cguyette@metrotimes.com.

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